« AnteriorContinuar »
Mr. BUCHANAN. Very.
Mr. Hart. Well, if Congress wants a report, they can pass a resolution and require it, can they not?
Mr. BUCHANAN. Certainly. This hearing is to develop the facts and let Congress do what it pleases. It is just a peculiar situation that has arisen. The fact of the business is, if crop-production loans are going to be made, they ought to pass an act putting it under the Secretary of Agriculture to make them, because he is equipped and has the trained force to do it on the seed loans, and he ought to be permitted to attend to the crop-production loans and to attend to the whole business and not mix it up with the Reconstruction Finance Corporation at all. But now what have you? Of course, you have two sets of employees, two organizations, one making crop-production loans and the other trying to collect the seed loans heretofore made. It is true that they cooperate together and that the collectors for the seed loans heretofore made cooperate with and help to collect the crop-production loans, wherever they may be.
Secretary HYDE. Theoretically, that is true; but what we have actually done is to combine the organizations in the interest of economy, except when it comes to accounting; if we collect a dollar we have to know which fund it goes to; that has to be kept separate.
Mr. BUCHANAN. Well there is another extra expense.
Mr. BUCHANAN. No; it is not very large, but these little things here and there count up.
Secretary HYDE. Yes.
ORDER IN RE TO 25 PER CENT PAYMENT ON MORTGAGES
Mr. BUCHANAN. Now, since you are on the stand, I am going to ask you a little about collections. Tell us a little something about the order authorizing the wheat borrowers to pay 25 per cent in satisfaction of the mortgage-not of the debt, but of the mortgage and the cotton raisers to collateralize their cotton at 9 cents a pound in satisfaction of the entire mortgage.
Secretary HYDE. Well, not in satisfaction.
Secretary HYDE. It might have that practical effect in some cases but we have never released the mortgage unless the debt was paid or collateralized. Well, I do not know whether I can accommodate you with a complete explanation, or not. The truth is that Congress has never given us one single solitary syllable to go by, as to whether we are even to collect, or not. You can not find in this whole program any mandate or direction from Congress to collect the loans.
Mr. BUCHANAN. Except the appropriations body.
Secretary HYDE. Yes, that is true; but that was ex post facto in most cases; in other words, the appropriations for continuing collections were all made after we had inaugurated the program for collections. The collection program has been a growth. The fundamental purpose of Congress undoubtedly was much more the relief of distress than it was economic. We have tried to administer these things in recognition of that fact; we have assumed, and I think probably correctly, that the order to loan carried with it the duty to follow through, and we have done it the best we could under the paucity of direction, with a view to ameliorating, rather than increasing, the local distress,
Now the difference between the orders made in the Northwest and the South-in other words, between the wheat grower and the cotton grower—is a difference due to the feeling of the people themselves in the areas affected, and also to difierent situations in which they found themselves. Now we have never released the mortgage; the 25 per cent order that was made does not release the mortgage. It is not a moratorium.
Mr. BUCHANAN. You say it does not release the lien on the balance of the crop?
Secretary HYDE. Let me read it.
Secretary HYDE. Let me read it. On the seed loans, now, the original collateralization agreement was perfectly plain that it was collateral and not payment. I am talking now about what we sometimes call the drouth relief loans.
Mr. BUCHANAN. You are talking about the former acts, not the crop-production act.
Secretary HYDE. Yes.
Secretary HYDE. I think in the course of the administration of the seed loan act, several of our people probably made statements that would give the farmer a pretty good case against us, because some of our own people did not discriminate between payment and collateralizing; but in this order in the Northwest it reads:
I am authorized by the President to say that the department wishes to handle the situation with the utmost consideration to the horrowers who are in difficulty. You will realize that the law contemplates that the loans must be paid out of this crop and to give such extension as you wish will require legislative authority. To meet the needs of those who are in distress, the department will not press for collection of these loans until the Congress has an opportunity to act.
Now that was our original statement made to a group of the northwestern governors—the opinion announced to them that we did not feel that we had any right to release a Government lien.
Mr. BUCHANAN. I think that statement is correct.
Secretary Hyde. That an extension would require legislative authority; although from the beginning we have dealt, as you know, with each individual borrower and tried to handle it, at least, on the basis of his individual need. Now, the President amplified that language with a statement in which he said:
In order to clear the matter up and in order to enable such farmers to provide for their families, the Secretary of Agriculture has directed the department to accept from such farmers—that is, those in distress—25 per cent of the amount due, together with an agreement to secure the remaining 75 per cent of said debts on whatever terms Congress might authorize.
Now this is clearly a statement dealing with those who are in distress.
Mr. BUCHANAN. But, as a matter of practical application, it applies to all of them in that position?
Secretary HYDE. I think it does. I think one of the weaknesses of this whole loan business is that you can not make discriminations as a matter of governmental action.
Mr. BUCHANAN. It applies to those who are in distress and to those who are not in distress.
Mr. Hart. All the farmers are in distress.
Secretary HYDE. Nearly all of them are, Mr. Hart, there is no question about that. Yet you might be surprised to know that even under this order, of the collections made in the Northwest to December 6, practically 50 per cent of those collections have been in full payment of the individual loan.
Mr. BUCHANAN. That is a great deal better than I have been informed—and not by anybody from your department, but just generally.
Secretary HYDE. Unhappily, the gross amount of the return is no so large as we would like to have it in the Northwest. In the last three years Congress has put a vast amount of money into the Northwestern States, and the percentage of payments has been distressingly small.
Mr. HART. How does the per cent in the Northwest compare with the per cent in the South?
Mr. BUCHANAN. Before you get on that, let me ask-in the collection of these loans has a mortgage been taken on next year's crop?
Secretary HYDE, No. We have taken an agreement. I will just put this in the record: In consideration of the sum of $
said sum being 25 per cent of the amount due by the party of the second part to the party of the first part, it is hereby agreed
(1) That upon the payment of the sum aforesaid and the execution of this agreement, the party of the first part will permit the party of the second part, for his own benefit and use, to sell or otherwise dispose of the balance of the crop raised by him during the 1932 season.
(2) The party of the second part covenants and agrees with party of the first part that upon demand he will execute and deliver to the party of the first part a good and valid first-crop lien, by the execution of such lien agreement as may be appropriate, as security for the balance said loan, on all crops to be produced in 1933 by him, wheresoever the same may be situated, or that he will secure the payment thereof at such time and in such manner as the Congress of the United States may hereafter provide. That pending the execution and recordation of a first-lien instrument on his 1933 crops, or the giving of such security as Congress may require, he will not execute any instrument creating any lien upon said crops unto any person, firm, or corporation, nor will he voluntarily permit any person, firm, or corporation to obtain any lien thereon; nor will he confess any judgment upon which an execution upon such crops might be issued until the lien instrument agreed to be given by him to the party of the first part as security for the deferred portion of said loan shall have been duly executed and recorded.
I think that will give you just what the agreement is that we have made.
ESTIMATE OF APPROPRIATION FOR 1934 FOR COLLECTION OF SEED
Mr. BUCHANAN. The question now is whether or not that ought to be the business of the Reconstruction Finance Corporation. Secretary Hyde. Well, personally I am inclined to agree with you.
Mr. BUCHANAN. Mr. Jump, is any of this $500,000 estimate here for the collection of seed loans intended to collect these crop production loans?
Mr. Jump. No; this $500,000 is just to carry the share in the collections of farmers' seed loans. Mr. BUCHANAN. What is that?
Mr. Jump. It is just to pay a fair share in the collection expense of the farmers' seed loans as distinguished from the crop production loans.
Mr. BUCHANAN. Suppose there is no money available to collect the crop production loans. Does any of that $500,000 go for the collection of crop production loans?
Mr. JUMP. No; it is restricted to the collection of the Department of Agriculture loans cited in the appropriation act.
Mr. BUCHANAN. What situation are we in now to collect the balance of this $64,000,000, which would be $30,000,000 or $40,000,000 of this crop production loan?
Secretary HYDE. Well, we have the expense money in our general account to pay for the collection of this $50,000,000 balance.
Mr. BUCHANAN. Then, are you authorized to use any amount of this to collect these loans, or do you have to have an order of the Reconstruction Finance Corporation?
Secretary HYDE. We are operating under our own discretion in that matter.
Mr. SANDLIN. As agent for the corporation?
Mr. BUCHANAN. There is another defect in it. It gives the Secretary of Agriculture, whoever he may be, you, or your successor, a right to take such amount out of it as he please to collect these loans.
Secretary HYDE. I agree with you. You can not get any quarre with me on that. Furthermore, I think Congress ought to have laid down rules and regulations as to what we could do and keep this pressure off us.
Every section in the country has sent their delegations, and their leading citizens and organized main streets have descended upon us, as the locusts descended upon Egypt, and I think we ought to have anchorage in the enactments of Congress to which we can back up and say, “Gentlemen, we have at least these limitations."
Mr: BUCHANAN. On that, Mr. Secretary, you have just one branch of government in which the people engaged in the farming industry may think that branch ought to take care of them. On the other hand, Congress has every branch of industry and people thinking the Federal Government ought to do everything for the people, instead of the people depending upon themselves.
Secretary Hyde. You put your finger on a very large and philosophical problem. However, there are 450 Members of Congress who ought to divide the responsibility among themselves and not leave it all on one lone administrative official.
Mr. Hart. I want to get those figures in.
COLLECTION OF CROP PRODUCTION LOANS BY DISTRICTS
Mr. BUCHANAN. All right, suppose we get the amount of the loans and of the collections, unless that is something you want to say, Mr. Secretary.
Secretary HYDE. I want to give you all the information we have. Mr. BUCHANAN. I appreciate that. You have never held back anything from this committee; never.
Mr. HALL. This report is as of November 30, 1932, on crop production loans only. In the Minneapolis office collected $1,298,260.53, which is 5.58 per cent of the loans made in that territory.
Mr. BUCHANAN. What is the amount outstanding? Put it in figures.
Mr. Hall. The amount of loans made in that territory is $23,274,697.
Mr. BUCHANAN. And you have collected how much?
Mr. Hall. The percentage collected in the Washington office district is much greater than the percentage in the Northwest.
Mr. Hart. How do you account for a larger percentage made through the Washington office, being collected, than in the Northwest office?
Secretary Hyde. The Northwest has had, until this year, four successive crop failures.
Mr. Hart. You mentioned the Washington office.
Secretary Hydr. In the Washington office, we handle the whole seaboard, from Maine to Florida, but the percentage in the Nortnwest is due to the history of crop failures, and this last economic thing has been worse than any crop failure. They have gotten almost nothing above the cost of production.
Mr. SUMMERS. Do you not have some figures for the western country, other than Minneapolis?
Mr. Hall. In the Spokane office, the collections made have been 27.45 per cent of the loans made.
In the St. Louis office, the collections made have been 27.51 per cent, and for the Memphis office, collections amount to 30.59 per cent. Collections made in the Dallas office amount to 37.63 per cept, the highest percentage of collection. Mr. BUCHANAN. That is my country. Mr. Hall. Salt Lake City collections amount to 28.88 per cent. Mr. SANDLIN. Have you an account of the collateral there? Mr. Hall. No; we do not have an account of the collateral. Mr. SANDLIN. That ought to be in there to make up the record.
Secretary HYDE. It would be difficult to anchor on any definite figure. For instance, I would estimate that we have between 135,000 and 150,000 bales of cotton.
Mr. SándLin. You could get it up at present prices.
Secretary Hyde. We could give you the number of bales. One reason, Mr. Sandlin, is that while there is a definite price in the newspaper on cotton, it largely depends on the location.
Mr. BUCHANAN. You could give a fair idea of it.